Energy Transition: Unforeseen Security Risks from Decarbonization

Everyone understands that a future free from the effects of climate change is necessary for peace. Another widely held concept is that future energy may come from renewable sources. This concept needs to be more precise. The materials we need to decarbonize are both deadly and attractive. Broadly speaking, when we talk about a decarbonized future, we mean the ability to decouple economic growth from greenhouse gas emissions. This is what we call “green growth.” We don’t usually think about how we will achieve this if we cannot regain economic expansion through massive resource exploitation. Of course, to harness renewable energy sources like the sun and wind, we need to build technologies like solar panels, windmills, turbines and batteries.

In other words, our ticket to green growth is to fully explore the environment, because we need to extract huge amounts of non-renewable resources to make things. As we already know, mining can harm residents and ecosystems. But I want to talk about the implications for geopolitics and international security, and where and how much digging we’ll have to do. History shows that when the primary energy source changes, the power dynamics change as well. Countries that can control energy to their own advantage have the potential to become dominant in both politics and economics, and to take a central role in the global economy.

Think of Britain and coal, or how oil helped propel the United States and some Arab countries into global superpowers. This suggests that having access to and using energy directly results in the ability to influence geopolitical power relations. We also need to tackle the issue of implementing the most significant energy transition in human history as the climate clock winds down. A new generation of leaders is striving to take leadership. For him, all the necessary components needed for decarbonization and digitalization are crucial. So what happens to them?

On the demand side, we are at the beginning of an exponential demand curve. Global production of this key battery component increased by more than 300 percent between 2010 and 2020, using lithium as a substitute. This is a signal that decarbonization is beginning. The bad news is that material consumption will exceed historic levels in our “clean” future. The International Energy Agency estimates that at the current rate of development, an electric car will require six times more mineral input than a conventional car. This is based on a very basic measurement.

The race for resources and fragile states:

The World Bank predicts that by 2050, demand for clean energy technology will drive a 500% increase in global production of minerals, including cobalt and graphite. Now let’s look at the supply side. There are some exciting things going on there. We can predict exactly how the transition will change geopolitics by examining who is currently extracting and processing minerals and where resources are located to meet future demand. As a result, China typically controls the processing of a raw material such as lithium, while Australia and Chile typically control mining. The Democratic Republic of the Congo is the leader in cobalt mining, while China is the leader in cobalt processing.

Although Indonesia and the Philippines dominate nickel mining, China typically leads nickel processing. In addition, China is responsible for the processing and extraction of rare earths. China has controlled the geoeconomic arena for the past 20 years, connecting rare earth supply chains at every stage, from mining to export and processing. While we sometimes hold China responsible for not moving quickly in its domestic energy transformation, the truth is that China knew long ago how important this would be for the transformation of other countries. For example, 100% of China’s rare earth supplies are needed by the European Union.

This gives China a rare chance to restructure the global power structure. But some would argue that this is a positive thing, because the global power structure still needs to be reshaped. This is true for the United States, China, and all other major actors: we need to make sure that the redesign process does not violate free societies and human rights. It also prevents supply lines from becoming weapons in the event of a world war or, more importantly, total climate breakdown. Unfortunately, there are already signs that this is happening. China is trying to access additional mineral resources through the Belt and Road Initiative.

Both the United States and Europe are considering relocating significant numbers of mining and processing jobs and altering some overseas connections to provide easier access to additional natural resources. Japan is also considering using some of its naval reserves in the oceans to create strategic reserves.

Nevertheless, Ukraine is a country rich in minerals. It is also one of only two countries that has worked with the EU to create supply chains for essential raw materials and diversify its economies. The aim of the cooperation was to strengthen the EU’s political and economic relations with Ukraine, while supporting its decarbonization efforts. Eight months into the relationship, the invasion occurred. Natural resources are not the only cause of war. However, they cannot be ignored when looking at cases. A new race for resources will soon begin, in which major corporations will fight for access to countries with abundant mineral resources in order to gain a competitive advantage in the supply of necessary raw materials. Nevertheless, some of these countries are mainly located in the Indo-Pacific region, Central Asia, Africa and Latin America.

Economists say this is great news because many of these countries, or at least a significant portion of them, need significant financial resources to accelerate their growth and climate change adaptation strategies. But still. Moreover, many of these countries have overlapping risk profiles. Many of the deposits were located in countries with relatively high rates of corruption. Many of the resources are located in countries that are conflict-stricken, like Myanmar and the Central African Republic, or are unstable, like Sri Lanka. Nations with abundant natural resources are also at risk from climate change.

Finally, one more thing. Do you mean those vast ecosystems that we need to protect and restore to maintain the status quo of the global climate? Preserving biodiversity and restoring the water cycle? Any action that modifies or destroys these ecosystems, such as mining or deforestation, undermines planetary security, not just international security.

Earth Security. In short, it is a perfect storm waiting to happen. The environment is being stolen, and institutional and socio-economic instability, corruption and climate disruption are creating conditions for a race for minerals needed for decarbonization. These problems will only improve if we manage to tame the mad race for resources. Everyone helps each other.

Furthermore, I would like to clarify this. Countries at the epicenter of competition for resources may suffer the most in terms of their ability to develop, adapt to climate change and reduce violence. But their story is not an isolated one. Distance is separated from their problems. The most visible weakness in this scenario is that we are heading towards a decarbonization trajectory that could threaten ecological integrity and increase the risk of conflict and insecurity, with potentially catastrophic global consequences.

The key lesson is that before we can afford to adopt new materials, technologies, and energy sources, we need to consider all the unintended consequences. Too many are at stake. We know that these are about our future. But they are also about our humanity. In addition, they are about our nature, or rather the type we have chosen for ourselves. The best solution is to reduce emissions. Not one question is allowed about this. But the future also requires planning for a decarbonized future as soon as possible.

The need for a global response

Future security from climate change is a prerequisite for peace. However, a future free from climate change is only achievable through peace. To promote peace, we must change the current state of affairs in world politics, business and the economy. So where should we start? First, study. Science can determine exactly which places are safe for mining and which are not, from an ecological point of view. We need to establish protected areas where mining licenses are prohibited and act as if these minerals never existed in areas where mining is unsafe. We can incorporate the ecological and socio-economic regeneration of mining regions into trade strategies. Second, a global public welfare framework. Let’s assume the goal is to decarbonize without endangering human life. In this case, the resources required for this process should be managed collectively within a global public goods framework. The alternatives are conflict and planetary collapse. So, as we work out the details of this regime, the nations at the center of the race for resources should receive appropriate, informed and compelling assistance to address the common problems of geopolitical competitiveness and climate disruption.

In other words, in our global energy transition, financing for conflict resolution, the fight against corruption and context-sensitive resilience must be given the highest priority. Thirdly, we are changing the way we think about business and economics. We are unable to change our energy structure. Instead, we need to use less energy and resources overall. The first step towards achieving this goal is to make significant public and private investments in circular economy models that support material substitution and recyclability. While this is a necessary first step, more is needed.

That is why we also need to develop ecological assessments for supply chains that, in addition to greenhouse gas emissions, take into account the simultaneous impacts of water, soil, biodiversity, materials and energy. Only on this in-depth basis can we fully understand the adjustments that need to be made to supply and distribution networks and, consequently, the evolution of globalization. Fourth place is innovation. All this will only be possible if we start to change the way we think about innovation. Restoring economic activity within the planetary boundaries is the goal of modern innovation. Anything smaller is business as usual; it is not innovation, not even the newest, brightest objects. Right now, we know two things. The priority must be to solve the fundamental problems of global economic redistribution. Furthermore, geopolitical de-escalation is necessary for decarbonization and regeneration. This is what we have transformed into the concept of ecological diplomacy.

Global power elites are putting a lot of pressure on Indonesia to adapt its foreign policy to this paradigm. Ecological integrity is the basis of all security, if there is anything we can be sure of. It is therefore the one thing that unites us and that we can all work together to fix.